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3 Market-Beating Stocks with Solid Fundamentals
The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.
The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Taking that into account, here are three market-beating stocks that deserve a spot on your list.
Sprouts (SFM)
Five-Year Return: +215%
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.
Why Are We Positive on SFM?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 5.8% over the past two years
- Expected revenue growth of 10.8% for the next year suggests its market share will rise
Sprouts’s stock price of $71.72 implies a valuation ratio of 12.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Brady (BRC)
Five-Year Return: +71.3%
Founded in 1914 and evolving through more than a century of industrial innovation, Brady (NYSE:BRC) manufactures and supplies identification solutions and workplace safety products that help companies identify and protect their premises, products, and people.
What Makes BRC Stand Out?
- Annual revenue growth of 11.3% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 74% projected revenue growth implies demand will accelerate from its two-year trend
- Free cash flow margin jumped by 5.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Brady is trading at $84.54 per share, or 13x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Arlo Technologies (ARLO)
Five-Year Return: +102%
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE:ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Why Could ARLO Be a Winner?
- Annual revenue growth of 7.6% over the last five years beat the sector average and underscores the unique value of its offerings
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 55.3% over the last two years outstripped its revenue performance
- Free cash flow margin expanded by 17.6 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $13.42 per share, Arlo Technologies trades at 15.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.